Skandia wants the FCA to revise rules which mandate the unbundling of platform fees on legacy business after April 2016.
The FCA has banned all legacy payments between fund managers and platforms by April 2016, with a two-year sunset clause from this April to allow firms to change their business models. Cash rebates and fund manager payments to platforms are banned on new business.
In an update to its policy handbook this week the FCA reveals one platform, which Money Marketing later identified as Skandia, argued cash rebates and rebates paid to platforms should be treated the same. The regulator says this “would have involved removing the April 2016 end date for ‘undisturbed’ legacy retained rebate business.”
Old Mutual Wealth vice chairman Peter Mann says there is an unlevel playing field between rebates to platforms and cash rebates, which are allowed to continue indefinitely for legacy business.
Mann says: “We think there is an inconsistency between the treatments of legacy cash and retained rebates. However, our new business pricing model has been designed to take account for the expiration of retained rebates and is compliant for April 2014 and 2016. Two-thirds of assets on our platform are now in our unbundled charging structure.”
The Lang Cat senior consultant Sam Lynn says: “The FCA’s position on moving to explicit platform charges is very clear. We think that ship has sailed.”